To evaluate and elect

The new leadership of the Christian Democratic party: change or continuity?

Are we moving towards an economic recession?

TO EVALUATE AND ELECT

The Legislative Assembly is readying itself to elect the functionaries who will hold two positions of great importance for the wellbeing of the population: the Attorney General and the Ombudsman. As is usual in these cases, debate and pressures tend to accumulate around some few names. As 56 votes are needed, the election cannot be decided by ARENA and its allies; the participation of the FMLN is necessary. So then, according to the traditional model, it is probable that the two big parties will engage in an interminable discussion which has as its basic objective to disqualify the candidate proposed by its adversary, leaving the good of the country and the institutions themselves to one side. Finally, when they tire of this, they will tend to opt for a poor solution which consists in throwing out the candidates of both contenders in order to elect a third candidate which neither of the contenders considers to be the candidate of the other. In general, the nomination falls to persons who may not be equal to the job, and who are not ideal candidates for the position. This is how it went when the current Ombudsman for the Defense of Human Rights was elected. It would, nevertheless, seem that the elections of the president of the Comptrollers’ Office and his magistrates obey another logic altogether.

ARENA recognizes that the leadership posts of the Comptrollers’ Office were divided up between ARENA and its two unconditional allies, the National Conciliation Party and the Christian Democratic Party. According to the ARENA version, this distribution of the spoils responded to little more than reasons of state related to the budget. Apparently, the approval of this latter was conditioned by its allies to the sharing out of the positions in the Comptrollers’ Office. Another version adds that the allies, moreover, demanded a heavy sum of money. The delay on the approval of the budget, therefore, is not only owing to the objections posed by the FMLN as to its inconsistencies and imbalances. This is another procedure practiced in Salvadoran politics in elections at a second degree removed. What is not understandable is that the FMLN stood by impassively and accepted the responsibility for the delay which was owing, in reality to other, less legitimate, interests.

To the surprise of many, it seems as though ARENA would be disposed to change this traditional methodology which responds to a patrimonialist conception of the state. The innovation would consist in evaluating the work of the current functionaries with a view towards considering their re-election. Although it is still not very clear what mechanism was used and although the motivation is not clean because ARENA has already pronounced itself, beforehand, as being in favor of the re-election of both functionaries, the introduction of the concept of evaluation ought not to be left unexamined. Even when ARENA aims to use the evaluation to justify both re-elections, it is necessary to introduce the idea into this kind of election and in general in all public activity.

In the case of the elections at a second degree removed, the first thing which ought to be evaluated is the situation or state of the public sphere or arena being dealt with —in this case, of the public ministry, pointing out not only its strengths but also its weaknesses and the dangers inherent therein. At a second point in time, it is necessary to evaluate the work of the functionary holding the position, beginning from the real state in which the ministry was at the moment the functionary assumed the post, specifying where he left it and pointing out how much was lacking for the achievement of the desired optimum. It is not only a question of pointing out activities and achievements which, doubtless, there are —and in abundance— but rather of contrasting them with what the situation was before, with what the situation is now and what it ought to be. Together with this one must pose the question of what kind of Attorney General and Ombudsman El Salvador presently needs. As a consequence, short, medium and long-range objectives ought to be established. The same evaluative process ought to be drawn up of the kind of ideal or appropriate functionary as well as the mission which should be given him or her when the post is assumed. Once found, the candidate ought to be advised that he or she must render accounts on the basis of the objectives proposed and, therefore, ought to be willing to assume them as his or her own in the presence of or in response to the Legislative Assembly.

Who ought to carry out the evaluation? Without doubt it should be the political parties, the deputies, the Political Commission and the plenary session of the Legislative Assembly. Nevertheless, the process of evaluation ought to be made in response to or with the participation of public opinion and the social organizations and in constant dialogue with them, opening up the arenas necessary so that they can take part in the process and what they have to say should be listened to without prejudice. What cannot be done is to evaluate or elect personages of this rank behind the backs of the social forces as is done now.

The danger exists that the evaluation might be subjective or be a product of ideological criteria or that it might be used as an interest to cover up interests which are disgraceful or unspeakable. Although all of these dangers are very real, given the polarization, the subjectivity and the poor level of democratic political culture currently in effect, it might be worthwhile to begin to put into practice this kind of democratizing exercises. The advantages are greater than the dangers and, in any case, the election might not be more biased or interfered with than if recourse were had to traditional mechanisms. The frequent repetition of this kind of practice has the enormous potential to accumulate democratizing experience and would surely contribute towards social and political maturity in the country.

It would even seem that ARENA aims to introduce the concept of evaluation into the reports that the executive power ought to present each year to the Legislative Assembly. If, instead of sending up a long laundry list of activities and achievements, each ministry and autonomy agency would explain to the deputies and to the country in general what the state of affairs currently is in each of the areas under its responsibility, the advances achieved in the course of the administrative year, the difficulties encountered, what still needs to be done in order to achieve the objectives proposed and the amount of resources necessary to do so, one might be able to observe with much greater faithfulness to the spirit of the law and, for the first time, functionaries would have to render accounts of their administrations.

The Legislative Assembly and, in particular, the two large parties, ARENA and the FMLN, have before them a good opportunity to begin to change political practice, transforming it into a possibility for real democratization, the strengthening of institutions which are key to the wellbeing of the population and the creation of a new image which could begin to substitute for the current image which is well worn away. They have the floor now and upon them depends, in large measure, the possibility that this process might become a positive experience.

THE NEW LEADERSHIP OF THE CHRISTIAN DEMOCRATIC PARTY: CHANGE OR CONTINUITY?

What, up until a little while ago, seemed almost impossible happened on June 13: Ronal Umaña had to leave the Secretary Generalship of the Christian Democratic Party (PDC). At the National Convention, convoked that day with the objective of electing a new leadership, three candidates presented themselves together with their intentions to occupy the leadership of the party. The first was Ronal Umaña himself, who, although weeks before had indicated his willingness to resign from his post, appeared to be resolved to struggle for what had functioned as his productive center of operations for a five year period. The second, Rosalío Tóchez, coming from the "old guard" PDC tendency and a bitter opponent of Umaña, represented once again the intention of that group to substitute and take control of the leadership of the party. The third had passed from being a sympathizer for Umaña to becoming his prosperous rival and was the one who finally won the primary elections. This is René Aguiluz.

The event was held in the midst of an outrageous disorder. Blows, insults and shouts reproduced what was —to the disgrace of the PDC and, even more, for the very process of the transition to democracy— and has become the notable characteristic of that party: divisionism and vulgarity. If it is true that El Salvador has left behind the epoch in which death was the only escape from political differences, it is also true that the lack of seriousness and serenity-—of which the PDC leaders have given very clear demonstrations on innumerable occasions—with which these differences are taken up these days constitute some of the multiple obstacles which the institutionalization of democracy is confronting.

But beyond the crudely shameful ups and downs of the Convention, it may be important to hazard a guess as to a response to the question about the significance of the election of a new PDC leadership. Can fundamental changes in the way the party is led be expected or hoped for? Or is it that nothing more is happening than a change of leadership carried out within the context of a structure exhibiting few possibilities for change? All appears to indicate that this state of affairs is the occasion for nothing more than a new power struggle. Throughout the entire Umaña administration there have been conflicts between the "old guard" and the "new political class".

Well, then, what is going on this time is simply one more division, this time within "the new political class" itself. It would be not at all odd that, tired of it being Umaña who handles more power and receives more favors because of his doubtful way of doing politics, his allies may decide to rise up and themselves aspire to the leadership of the Christian Democratic leadership group. Such an hypothesis, as well as not being either new or crazy at all, could explain the reason for the sudden change of attitude of certain members of the PDC who have remained close to Umaña.

An example of this: Aristides Alvarenga, the veteran PDC member who said that he saw in Umaña the solution to the problems of the PDC, suddenly decided to take note of how nefarious the administration of his friend had become for the party and began to support his removal as Secretary General of the party. It may be overstating the case to clarify that Alvarenga aspired to replace Umaña. Another paradigmatic case is, precisely, the current secretary René Aguiluz. The fact is that, a little before this new conflict arose, Aguiluz was one of Umaña’s closest confidents. During the Convention, on the other hand, he was as strong an opponent as the most belligerent member of the "old guard".

At this stage in the development of the situation inside the PDC and taking into account such questionable behavior on the part of Umaña, it would be too naive to think that either Aguiluz or Alvarenga were aware of Umaña’s doubtful maneuvers inside the party. That from one day to the next they have opted to offer resistance cannot but awaken many doubts with respect to the real intentions of the recent anti-Umaña faction. What now comes to light is the same problem as always: the crisis of credibility which takes hold of and drowns the PDC more and more. As things stand —and as they have been for many years— to trust the word of any of the PDC leaders at this point in time would be little more than a shot in the dark. Those who eternally attack Umaña never ceased to wage war against him and try to supplant him, without taking into consideration the harm that they could do to the party by their actions. How can one think surely and clearly that what they really sought was to recuperate the "spirit" of the PDC and save it from the ignominy to which Umaña has submitted it?

The ex-allies of the questionable vice-president of the Legislative Assembly present still more suspicions. Do they aim to make people believe that only recently—just now—they have begun to take note of the irregularities in the way the party is run? Only when Umaña was directly accused of corruption by the Attorney General’s Office did they notice the lack of transparency in the handling of PDC funds? Only just now that his image before public opinion is flagging so dreadfully did they decide to confront him? The evident contradictions in which these PDC leaders have become involved, precisely on the eve of the National Convention which was to change and renew the leadership, make mere rhetoric of their declared intentions to unify the party, to run it in a transparent manner and to make of it a real opposition party.

All seems to indicate that, although Umaña’s leaving is a victory —more for Aguiluz and the PDC than for the country itself—, nothing new is likely to happen in the dark and turbulent waters of the PDC "aquarium". The PDC leaders continue to do nothing more than stroll through the leadership circle of the PDC waiting with bated breath for the most minimal opportunity to make a rush for the post of Secretary General; intensifying intrigues and conspiracies; throwing aside loyalties, joining in cabalas, but leaving them when they no longer serve their purposes, as they please; blaming each other for everything that happens or does not happen in the party without anyone finally assuming responsibility for anything and, finally, engaging persistently in internecine warfare while slowly contributing, all the while, to the approaching death rattle of their party.

More than politicians who serve the people and their needs, and more than Christian Democrats interested in strengthening democracy and Christian values, these PDC members appear, rather, more as birds of prey circling their succulent victim, which is, in this case, access and use of power within the PDC. The ex–candidate for the presidency, Mr. Rodolfo Parker, has joined this group without having accumulated a single merit which would qualify him as a Christian Democrat; this gentleman now belongs to the political commission of the PDC and also, doubtless, harbors intentions of removing and replacing with his own person, his former mentor.

As things go, nothing indicates that this change in leadership might signify a change of attitude among the current leaders of the PDC: A real transformation can only take place with a change of generation, but, above all, with a process of becoming consciously committed to such a change and this must include the assumption of a genuine desire to contribute to the transformation of Salvadoran reality. Finally let us repeat once again: while the PDC members continue to place their own personal interests above the interests of their own party —not to mention the interests of society as a whole— confidence in the political class will continue to be undermined and, with it, the institutionalization of democracy will continue to run the risk of entering into a state of stagnation.

ARE WE MOVING TOWARDS AN ECONOMIC RECESSION?

The economic tendency most commented upon by the business sector in recent weeks has been the inflation rate and the reduction in economic growth. While members of the governmental economic committee hurry to point out that these are indications of a healthy economy, members of private enterprise suggest that there currently exists evidence that the economy could be moving towards a recession and a fall in prices.

Presented with these diametrically opposed interpretations, important questions arise as to the real situation of the economy, but it is clear that its functioning is already in a state which is not as solvent as it was four years ago. The low level of growth in production, the broadening of the commercial deficit and the increase in the fiscal deficit are some of the most worrisome dynamics to be perceived, but also worrisome is the fact that even the financial sector —previously the most dynamic sector— is experiencing problems in the recuperation of credits and in a reduction of its profits. The behavior of prices and production ought, for some, to become a red light for the government to take notice of.

During recent months the inflation rates have been consistently decreasing to such a degree that, during recent months, they have been found to be close to 0%: specifically, in February and March, inflation was at 0.2% and in April at 0.1%. According to the Central Reserve Bank of El Salvador, this is the lowest inflation rate in the last 27 years and "it is influenced by a diminution of prices for the food group and the normalization of prices of agricultural and livestock products". Although we are not dealing with the first period in which such significantly low prices are reported in inflation rates, it is the first time that the inflation rates are nearing 0%. During the decade of the 1990´s, inflation has risen to heights of 19%, in 1991, and to rates of only 4% during 1998 and, should the tendencies indicated for the fourth four-month period continue, they should be at least 1% during 1999.

For the president of the Central Reserve Bank, Rafael Barraza, this behavior in prices shows that a negative inflation rate that causes a situation in which "consumers are benefited by the low prices", especially in agricultural products whose prices have diminished once the offering has recuperated from the losses provoked by hurricane "Mitch". Nevertheless, for representatives of private enterprise, the current situation is not so hopeful because they say they are experiencing a tendency towards less sales, a fall in prices and even a lack of financial solvency. According to the National Association of Private Enterprise (ANEP), Ricardo Simán, the current low inflation rates are a reflection of the deflationary process which, in his judgment, could become a recession hereafter.

On the question of economic growth, the government as well as private enterprise coincide in indicating that production is found to be at a low growth phase, especially notable being the reduction in the annual growth rates during the period following 1995. Paradoxically, based on the Central Reserve Bank data, distinctive interpretations might follow because at least there are not noticeable reductions in growth rates between 1998 and 1999. Taking note of the Index for the Volume of Economic Activity (IVAE), published by the Central Reserve Bank, production could even be growing at a greater rate than during 1998. During the first trimester of 1999, production reached rates of between 4% and 5% while growth rates for the same period in 1998 were 2% and 4%.

The business associations, however, emphasize that economic growth is ever less, the degree which many businesses currently find themselves in delinquency with regard to their debts with the financial system, for which reason they have suffered a reduction in profits and, in the majority of cases, banks have been obliged to increase their capital in order to deal with the increase in overdrawn and delinquent credits.

This increase is an unequivocal demonstration of a deterioration in the business microeconomies especially owing to the contraction of sales, income and profits. The portfolio of delinquent credits grew by more than 496 million colones between the first trimester of 1998 and the first trimester of 1999, which implies an increase of 54.5%. Concomitantly, between the same periods the banks have experienced reductions in their profits in amounts of their totals of more than 37 million colones, which implies a reduction by 20.2%, while they also saw an increase in their reserves in order to face the huge number of unpaid debts to the banks.

In this context, businessmen have their own interpretation of the measures which the government ought to implement, among which stand out the reduction in interest rates, the elimination of the anti-exporter bias in the economy and the protection against unfair foreign competition. Up until now, the new government has not offered a concrete response to the hopes and expectations of the business, but they have announced that they will soon make known the content of their economic strategy and they have shown a willingness to meet with the private business guilds in order to discuss possible forthcoming measures.

Faced with this reality, it is noteworthy that the business sector itself is showing its discontent with the economic results obtained up until now, after a decade of ARENA governments which have always shown their support. This shows that, in spite of stability and economic growth, a favorable insertion into the international economic scene has not been achieved and that business enterprises are not adapting to the new economic context which the ARENA policies have created.

In fact, they continue to depend, in great measure, on the same traditional exports —coffee and sugar— for the creation of internal profits. The factor creating equilibrium in the external sector and the dynamic motor force for additional demands is the flow of family remittances. Only this explains that it might be possible to increase net international reserves in a context of broadening the deficit in the trade balance and the fall in economic growth rates.

The principal problems experienced by business enterprises are not rooted in the fact that inflation might be zero or that production is growing less than before, but rather in what has not been able to reconvert itself in order to face the opening up to foreign trade and or because private investment has focussed, without control, on service activities which generate almost no profits. Not only is the government responsible for the current situation, its intervention is required in order to reorient business and the economy.

Different economic signals are coming to the fore indicating that what is necessary to lay the internal, national bases for economic growth and satisfaction of the basic needs of the population are not being implemented. This is, really, not a new problem, but it is much in evidence almost since the first half of the decade of the 1990’s with the movement of the economy towards dominance by the service sector. Nevertheless, the fact that even the financial sector —one of the most prosperous in the last decade— is feeling reduction in its profits; this shows that the economic model is reaching its limits and that a redefinition is required.

The current state of affairs marked by lessening in economic growth and the stabilization of prices is not the only element which ought to guide this redefinition because , from the beginning, the result of ARENA policies was the marginalization of agricultural livestock and industrial sectors, which reduced the possibilities for (1) an increase in exports, (2) for the creation of productive jobs and (3) for a return to a self-sustaining economy. For this reason, the principal objective of any development plan ought to be to stimulate investment, competition, growth and jobs in productive activities with the capacity to generate competitive exports.